Manifesting Values

In The Role of Values, we explored how successful companies use clearly defined values to guide decisions. Now, we’re going deeper to show how a values pyramid can be the backbone of goal setting and strategic decision-making, creating consistency in execution and preventing reactionary swings in focus.

Getting an entire workforce aligned is extremely difficult in the best of circumstances. A lack of clarity makes it worse and dramatic course corrections make it largely impossible.

Priority Puzzles

There are a great many employees in companies trying in vain to understand what is most important - so that they can plan and react accordingly - while at the same time a great many executives are expressing frustration that their employees just do not seem to get it. Why the disconnect?

In some cases, what is being said is not consistent with what is happening, e.g. the company claims that “people are our number one asset,” but investments in employee development are nowhere to be found. In some cases, executives are operating in fire-fighting mode, lurching from one priority to the next - they decide to restructure, then decide on a merger, then decide to cut costs, then the execs go quiet, then something else.

In either case, employees are left confused because they do not know what is really important.

This sort of ambiguity creates quite a bit of chaos and wasted effort, often more than anyone realises. What appear to be minor disconnects at the top can create huge perception gaps for the people working in the trenches. In attempts to adjust to their understanding of new priorities, new projects are created, other projects are cancelled, goals change and so on.

Getting an entire workforce aligned is extremely difficult in the best of circumstances. A lack of clarity makes it worse and dramatic course corrections make it largely impossible.

A Decision-Making and Goal Setting Framework

At its core, the values pyramid is a stack-ranked list of value-oriented priorities. Each layer represents what the company deems most important, with foundational values at the bottom supporting everything above.

The purpose of the pyramid is to articulate a long term, consistent framework that guides how decisions are made and how goals are set throughout the organization.

How does it work in practice? Let's imagine a software company that has the following pyramid:

1. Engaged and Talented Workforce
   
   
   • Why it's foundational: The people in the organization are the bedrock of its success. Engaged, skilled and motivated employees ensure the company can execute on its strategy and adapt to challenges.
   • Example goals/metrics: Employee engagement scores, retention rates, internal promotions.


2. Product Excellence
   
   
   • Why it's foundational: Delivering high-quality, innovative products is often the core mission of a software company and directly impacts the customer experience and brand reputation.
   • Example goals/metrics: Bug resolution time, feature adoption rates, technical debt reduction, product reliability metrics.


3. Customer Satisfaction
   
   
   • Why it's critical: Happy, loyal customers drive revenue, retention and growth. Their feedback often shapes the product roadmap and helps improve offerings.
   • Example goals/metrics: Net Promoter Score (NPS), Customer Satisfaction Score (CSAT), customer retention rate, response times for customer support.


4. Financial Health
   
   
   • Why it's essential: Ensuring profitability and financial sustainability allows the company to invest in its people, products and growth initiatives.
   • Example goals/metrics: Revenue growth, operating margins, cash flow, cost-efficiency improvements.


5. Mission Impact (Top Layer)
   
   
   • Why it's aspirational: A well-defined mission inspires employees and aligns the company with long-term goals beyond profitability. It reflects the organization's higher purpose, whether it's driving innovation, creating societal value or transforming industries.
   • Example goals/metrics: Contributions to industry standards, societal impact metrics, alignment with sustainability initiatives.

In this example, when an employee is faced with a decision between investing in a product feature or a short-term revenue-generating opportunity, they would prioritize building the right product because it’s lower in the pyramid, indicating it’s more foundational. They can feel confident about this decision because the pyramid doesn’t just suggest what to do, it justifies the decision.

Embedding the Pyramid in the Goal-Setting Process

The pyramid plays a pivotal role in guiding the goal-setting process for the organization. The idea is to ask each team to set goals for each of the different levels of the value pyramid. For example, if people are on your pyramid, every team should have metrics and objectives related to employees, e.g. engagement, training or retention. If product excellence is one of the company values on the pyramid, teams should establish metrics and goals related to product improvements or innovation.

This mapping between goals, metrics and values ensures that each value is being tended to, and conversely that every goal is aligned with the company’s values.

Furthermore, by having goals tied to each value, teams avoid the pitfall of focusing solely on immediate needs at the expense of long term, foundational priorities. Even if financial health becomes a key focus for the year, there should still be active goals related to people and product to maintain long-term stability and growth.

Adapting the Pyramid to Reflect Shifting Focus

When a company decides to shift its focus, the pyramid helps guide that shift in a structured way. If the company decides that this is the year to get costs under control, the pyramid can be updated to elevate financial health as a more prominent priority. The new, updated pyramid makes it clear what has changed and what stays the same, and in doing so informs goal-setting and decision-making across the company.

Organisations respond slowly to change. Communicating changes effectively is crucial but it is just as important to be clear about what is not changing. Using a values pyramid to guide the goal setting process and then updating the pyramid when priorities change makes it very clear that these changes are a priority, while reassuring them that while priorities may shift, the fundamental values guiding their work remain.

The Advantage of Managing Execution Against Well-Defined Principles

Managing execution based on the values pyramid is a powerful safeguard against reactionary management. It creates and supports a roadmap where course corrections are subtle, deliberate and aligned with a broader vision. Strategic adjustments can be made without derailing existing efforts or causing employees to feel like they’re chasing a moving target. The organization becomes resilient, capable of adapting without losing its core focus.

Employees benefit from knowing that even if certain priorities are temporarily emphasized - such as cost-cutting - the overarching values remain intact. This stability builds trust and keeps teams aligned and motivated. Managing execution against well-defined principles makes it easier for employees to focus on their work without the need to constantly readjust their understanding of what’s important.

The Bottom Line

A values pyramid isn’t just a conceptual tool, it’s an operational framework for setting goals, making decisions and adapting to new challenges. It prevents the kind of lurching from focus to focus that can disrupt progress and morale, and instead promotes a balanced, long-term approach that keeps the entire organization rowing in the same direction.

Managing with clarity and consistency isn’t just good leadership, it is essential for sustainable success.

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